The two-week long party celebrating the resurgence of the U.S. economy got some sobering news in the August employment report just released by the Bureau of Labor Statistics. While the data on Gross Domestic Product, manufacturing output, and productivity paint a picture of renewed growth, the news on hiring by U.S.businesses just keeps serving up the same old story of stagnation. Like a patient who must amputate a limb to survive, the U.S. economy seems to be getting better by getting rid of some of its workers.

To be sure, the job losses are small. The decline of 93,000 payroll jobs nationwide reported for the month of August by BLS is tiny in comparison to the losses suffered in the teeth of the recession, and miniscule when compared to the overall size of the work force. But the stubborn reluctance of employers nationwide to reverse themselves and start picking up the workers they have let go is a signal -- for many, at least -- that the true recovery is not yet underway.

As we move into what some call the "silly season" of national political elections, that point is sure to be emphasized. Yet, if the track record of recent recessions is any guide, it is our expectations about job growth, rather than job growth itself, that are more likely to change.

Jobless recoveries have become normal recoveries, at least for the U.S.economy. There is no "bounce-back" in hiring in the aftermath of recession because employers have made adjustments to permanently eliminate the need for the lost jobs.

At least that is what the data for the last two recessions, in 1991 and 2001, tell us. In the eight quarters that have elapsed since the beginning of the 2001 recession, economic output has rebounded and is now almost 6 percent higher. Yet there are 1.7 percent fewer workers on payrolls nationally than there were two years ago.

Superimposed on the boom and bust of the business cycle has been a simultaneous ramp-up both in price competition from abroad, and in productivity. The increases in both pre-date the recession, and will likely live long beyond.

The cumulative impact of roaring productivity increases is being felt across the economy. Last year, changes in the workplace enabled American workers to produce 6.3 percent more product with no increase in hours, yet the rate of expansion in output was only 2.4 percent.

That rate of increase has only slowed slightly through the first half of this year. Is it any wonder that employers are reluctant to add to payrolls?

There is also recent history to consider. Economists and politicians alike have a nasty habit of putting recessions under a microscope and ignoring what preceded them. The pre-2001 economy was not only on a 9-year long winning streak of uninterrupted growth, the technology sector in particular was super-charged in part due to the high levels of spending associated with the Y2K turnover.

As a result, the proportion of the adult population who were working in the labor force had risen to nearly 65 percent. Retirees were coming out of retirement, and teenagers were fielding multiple job offers even before they started to shave.

Coming down from that level, like any job loss, has been painful and disruptive. And as is the case with every recession, the job cutting cleaver has cut bone as well as fat. But any expectations of a quick resumption of robust job growth, given the situation facing U.S.employers today, are not going to be met in the coming months.

Patrick Barkey is director of the University of Montana Bureau of Business and Economic Research. He has been involved with economic forecasting and health care policy research for over twenty-four years, both in the private and public sector. He served previously as Director of the Bureau of Business Research (now the Center for Business and Economic Research) at Ball State University, overseeing and participating in a wide variety of projects in labor market research and state and regional economic policy issues. He attended the University of Michigan, receiving a B.A. ('79) and Ph.D. ('86) in economics.

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